Housing Market Renewal

Graham P Jones Excerpts

Tuesday 12th July 2011 Westminster Hall

[Graham Jones (Hyndburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gale, and I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing a debate on an important issue to my constituents, the axing of HMR.

HMR was overall a successful scheme, although I admit there were some problems, which I will address later. I want to address how the ending of the scheme affects my constituency and low-demand areas; some of the misleading statements put out by the Government; and the Government’s £30 million transitional fund.

Let us be clear where we are now: facing human misery. People were given assurances that the HMR red line around their neighbourhood would be a 15-year programme. It was not to be one that would first encourage disinvestment and degeneration and then, at the bottom of that regeneration trough, have the funding pulled to leave streets abandoned, in the worst cases looking like ghettos.

The regeneration did have cross-party support. The Minister himself was once a fan and, from reading Hansard, I note that he was a supporter. The Prime Minister made unequivocal promises back in 2006, when he took the then shadow Cabinet on a visit to Liverpool. While walking along some of the terraced streets, he observed,

“Run-down areas become a magnet for dumping and littering.”

He laid out this Government’s political ambitions, saying of regeneration,

“It’s a huge task. I want the Conservative party to be the party of urban regeneration. The aim is to make our cities better places for people to live in.”

People rightly feel badly let down; that the Government and the Prime Minister have broken their promises. That can be best summed up by Peter Latchford, the former chair of Birmingham and Sandwell pathfinder:

“I am particularly concerned at the message sent to people living in complex and deprived areas when a programme like this is terminated so abruptly. In Birmingham and Sandwell, we showed that the best results come from involving local people; from investing in long-term relationships of trust; from holding ourselves properly to account locally. There is no better way to disillusion such people, who have seen a succession of ‘interventions’ come and go, than to pull the plug halfway through the promised period.”

HMR was successful; it made good progress in some of the most deprived areas. That is according to the Audit Commission, Shelter and the chairs of the former pathfinder areas that oversaw the regeneration. The Audit Commission report published this March showed that the decision to abolish the housing market renewal programme was ill-advised. My hon. Friends the Members for Liverpool, Wavertree and for Hartlepool (Mr Wright) mentioned the benefits identified by the Audit Commission, including £2.2 billion invested in the HMR programme since 2002, £5.8 billion in economic activity and 30,000 new property sites cleared. The HMR kept 19,000 jobs in the construction industry. In Newcastle Gateshead, £60 million in HMR funds, along with contributions from the council and the Homes and Communities Agency, secured £400 million in private investment and delivered more than 4,000 new homes. The Housing Minister is keen to say that we need new homes, so he should be aware of those facts.

I want to put on record the Audit Commission’s summary, as it is important:

“The HMR programme is making a difference to the communities it serves, with fewer empty houses, reduced crime, and more jobs and training opportunities, especially in those neighbourhoods that are more advanced in their programmes.”

It goes on to discuss the Government’s current proposals for a £30 million transitional fund, essentially to fund the evacuation of residents in what, in my opinion, is an attempt to remove the personal misery involved from the broadcast and news media in order to assist the Government politically. The Audit Commission’s summary says that

“the emphasis must be on completing current key interventions; not least to ensure that promises made to communities are met and to reduce the risk of previous investments being undermined by leaving a legacy of uncompleted projects. At this stage there is…a significant risk that neighbourhood regeneration projects stall, leaving communities living in a poor quality environment indefinitely.”

There seems to be no exit strategy and a lot of waste. The sudden withdrawal of funding has left local authorities unable to complete projects that were already under way. The Government should have considered a phased withdrawal from the programme, and the scheme’s management should not have been based on the five reasons the Housing Minister trots out so frequently, all of which I will dismiss.

The first reason is deficit reduction. The Government are ignoring the plight of the areas involved, the promises made and the investment so far. As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said, we had the opportunity not to introduce such a great deficit reduction programme. We are going too far too fast, and it is hurting our communities. The second reason is future funding, to which I will come, and the £30 million in relief, particularly the regional growth fund, which my hon. Friend the Member for Liverpool, Wavertree discussed, and the new homes bonus, to which the Housing Minister keeps returning. The third is waste, the fourth is top-down targets and the fifth is a conflation of over-supply and under-supply in housing markets.

There has been waste in HMR areas, but I remind the Minister responding to the debate that of the five areas for which he is providing funding, Hull, Liverpool and Stoke were Liberal Democrat-controlled, East Lancashire was Conservative and Liberal Democrat-controlled, and Tees Valley had no overall control. It is not a Labour issue. In East Lancashire, Hyndburn’s Conservative council was handing out full market value payments plus relocation grants plus a cash handout of £30,000, and undertaking group repairs at £55,000 a property, which was more than the full value. Significantly, the council never engaged with estate agents or architects on added value or the redesign of properties, nor did it seek the best investment value. I am told that in Liberal Democrat Pendle, £1 million, not including acquisition, was spent converting eight houses into four. Another issue is the lack of Government intervention in Liberal Democrat and Tory-controlled councils.

My hon. Friend the Member for Hartlepool mentioned top-down targets, another issue to which the Housing Minister keeps referring. A pathfinder, as the name implies, is a housing programme in which local authorities were told to find a path. There were no top-down targets that anyone is aware of except the Housing Minister, who said in a reply to my right hon. Friend the Member for Birkenhead (Mr Field):

“Some pathfinder schemes were successful; however, others attracted controversy due to an over-reliance on demolition, in part encouraged by top-down government targets.”—[Official Report, 20 January 2011; Vol. 521, c. 901W.]

The Housing Minister has made that assertion repeatedly. Can the Minister here today name a single top-down target imposed under the HMR programme? I cannot and nor can anyone else—including the Housing Minister, who has failed to provide a single meaningful example so far.

Turning to my constituency, Hyndburn has unfunded areas like those mentioned by my hon. Friends. The future of Woodnook and Peel in Accrington is now unfunded, and I will assert to the Minister the sheer scale of the problem. Residents in the area were consulted in 2005 by the Conservative council. Plans were drawn up and presented that included details such as houses to be demolished and trees to be planted. The Conservative council scrapped those plans and then went into “spend, spend, spend” overdrive in West Accrington. In 2010, the council repeated the process, covering some 70 terraced blocks with 15 houses a block, a considerable number of properties. The hon. Member for Rossendale and Darwen (Jake Berry) was courteous enough to visit last month and recognised the true scale of the problem, but the Housing Minister has yet to come through on his promise to visit Hyndburn and see the HMR-related problems in Accrington.

Residents of 70 blocks in red-line areas believed that their area would be regenerated, but since the cuts in the comprehensive spending review and the axing of HMR, the council has scaled back its plans to include just five blocks. In many blocks outside the area where transitional money will be spent, occupancy rates are between 30% and 80%. A press release from the Department for Communities and Local Government on 9 March this year stated:

“This coalition Government is committed to helping vulnerable people and will not stand by when residents are stranded in derelict neighbourhoods through no fault of their own.”

Five out of 75 blocks are being done and 70 blocks are being neglected, some of which meet tier 1 and tier 2 criteria for the £30 million and have less than 50% occupancy.

As my colleagues have said, £30 million is grossly insufficient. Four blocks that I have looked around make me think of the misery on those streets. Surely the Minister must recognise that that cannot carry on. In effect, even with the £30 million, we are abandoning people in HMR areas. Worse, although some blocks qualify for match funding under the Government scheme, it is ridiculous to think that a local district council could afford to match Government funding to deal with such areas, even though they meet the criteria. We will be abandoning and neglecting people who meet the criteria, despite two previous plans. Such is the desperation of the district council to do something that it is prepared to say whatever it takes to the Government in order to get any crumbs that might help people. The council knows that it is abandoning residents because it has been shorn of Government funding, and the private sector does not want to know. We risk facing blight compensation notices.

The Housing Minister conflates over-supply and under-supply, trotting it out as a reason for the shortage of housing in the UK. He said on 17 January:

“The housing market renewal programme was responsible for demolishing a large number of homes—so many that there are fewer affordable homes after the 13 years of the previous Government than there were when they got into power in 1997.”—[Official Report, 17 January 2011; Vol. 521, c. 535.]

A conflation of the south-east and the north-west is imaginary and unhelpful, as it belittles the truth. There are more houses than people in significant parts of the north. Is the Minister not aware that Liverpool’s population used to be 1 million but is now nearer 450,000? East Lancashire’s population has fallen. There are more houses than people; demand is low.

Is the Housing Minister so lost from his brief as to be unaware that there are 750,000 empty properties, most of them in the north? People do not want those homes, the private sector does not want them and hard-pressed councils have no money to deal with them. Is he really suggesting that the cure for low demand is for people from the south-east to move to the north? If so, is that official Government policy, and what is he doing about it? That is what he seems to be suggesting. How else will we fill those houses? If not, he should refrain from suggesting that there are more people than houses, for that embarrasses his own position.

My hon. Friend the Member for Liverpool, Wavertree touched on the regional growth fund. The Housing Minister told the House of Commons one thing that seems to be totally untrue, and he needs to address the fact that he has misled the House. As my hon. Friend said, the chair of the regional growth fund said that it will not accept funding bids, so for a long time those communities were led to believe that there would be a future, but there is none. I am sure the Housing Minister will be haunted by his words:

“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work”—[Official Report, 27 October 2010; Vol. 517, c. 1114.]

I want to address a second point that the Housing Minister touched on—the new homes bonus—because it is not only on the regional growth fund that he has misled the public. He has repeatedly confirmed that the new homes bonus will supplant HMR, yet figures distributed by the House of Commons Library show that my constituency received just £62,000. Is the Minister aware that the average price for acquisition is £77,000 in West Accrington and £45,000 in East Accrington? The difference is that one has had intervention and the other has not. That £62,000 will barely buy one house. When we find out that the new homes bonus will buy so few bricks, stones and slates, is the Housing Minister not embarrassed by his comment that the new homes bonus will assist HMR areas?

It is not only a Hyndburn issue. East Lancashire has some of the worst housing in the country, yet its five HMR local authorities are recipients of the lowest new homes bonus payments in the UK. All five feature in the bottom 27 out of 350 authorities and receive less than 90p per head in new homes bonus payments. Hyndburn receives 78p per head, while leafy Uttlesford receives £9.30 and conservative Tewkesbury £6.47. How is that fair? How is that consistent with the Housing Minister’s extravagant funding claims?

Given that there are more properties than people, it is no good the Minister saying that we will be rewarded for filling empty homes and that there is an empty homes budget. How? How will we get people into those houses? Empty properties are a revolving door. The Housing Minister is making ridiculous arguments. I presume he is suggesting that people leave delightful Tewkesbury and Uttlesford, where they want to live and where there is high demand, and move to Woodnook, Peel or Accrington, where there is little or no demand. When he makes those generic comments, I would like him to explain how he will square that circle.

Crime hot spots and human misery are key issues. Families remain trapped in deserted streets where projects have been abandoned. Those areas attract crime, with several experiencing arson attacks, which makes it very dangerous for those living there. Stuart Whyte, the chair of Gateway Hull and East Riding of Yorkshire pathfinder, said:

“The areas have increasingly become a magnet for crime and anti-social behaviour. Beyond this human misery the sudden withdrawal of funding has a major impact on the willingness of the private sector to invest in the areas.”

Mike Gahagan, former chair of Transform South Yorkshire pathfinder, said that

“the sudden termination in HMR funding has left many families in distressed surroundings”.

The Government have an obligation, and forcing local councils to accept liability will not make the problem go away, particularly in lower-tier district councils, which cannot raise the finance. The Liberal Democrat leader of Burnley council, Charlie Briggs, said:

“£30 million remains insufficient to meet the area’s needs. We need a policy and funding that gives us a bridge to Mr Shapps’ new world. We are in touching distance of a revitalised housing market. It will be disgraceful if the government now pulls the rug on us and, more importantly, our communities.”

That is a Liberal Democrat leader—it does not even come from the Opposition.

The Government are nowhere on regeneration. Their own document, “Regeneration to enable growth”, is an embarrassing three pages long, followed by some cut-and-pasted tables. Is that their position on regeneration—three pages? When the Prime Minister visited Liverpool, he put Lord Heseltine in charge of regeneration, stating:

“I am delighted to be here and announce the setting up of a Cities Task Force which Heseltine has agreed to chair. He has a great record in helping with urban regeneration and is a great friend of Liverpool’s.”

Questioned at last week’s Select Committee on Communities and Local Government, Lord Heseltine had this to say on regeneration: there is a paper out on regeneration; it

“is called ‘Going for Growth’ or something.”

It is actually called, “Regeneration to enable growth”. It is clear that the Government have abandoned regeneration and HMR. Those the Prime Minister has made responsible for it know so little and the Government do not care enough to do something about it. Perhaps the Minister has recognised that the Government have conveyed confusion and misinformation, and will eventually come back to the nub of the issue. The problem will not go away.

In closing, I note that last Tuesday the Housing Minister announced that he would look at a new fund. My hon. Friend the Member for Hartlepool has put the questions—where is that new fund and what will it do? Will it include the existing HMR areas? Will it be part of a strategic plan including public and private finance? Crucially, in my constituency, will it be more than the embarrassing £62,000 the Government provided in the new homes bonus fiasco? I close my comments there, Mr Gale. Thank you.

[Mr Roger Gale (in the Chair)]

In the light of that lengthy contribution, the Front Benchers have indicated that they are willing to curtail their speeches slightly. Mr Rotheram, you have about seven minutes.

--- Later in debate ---

[Andrew Stunell]

I was responding to the suggestion that Stoke-on-Trent might lose £26 million. Stoke-on-Trent will not lose £26 million. I think that I have already made our intentions clear. There have been some other statements, but the detail of the scheme will be well debated when it is published, so I think it is best if I go on to respond to several of the other points that were made in the debate, if I may.

It is way over the top for the hon. Member for Hartlepool (Mr Wright) to say that the Government’s decisions have set areas back by decades. That is absolutely not the case. Investments have been made and, even in this debate, reports have been given of their success. It might be said that there is a greater belief in the successes among Opposition Members than Government Members. It is absolutely not the case that such work will be set back as a result of the decisions that have been made.

I want to link that to what the hon. Member for Hyndburn (Graham Jones) brought to the debate. I leave aside his dismissal of deficit reduction, because that sensible Government aim underpins our whole financial strategy. The hon. Member for Hartlepool must be well aware of the deficit problems found by the incoming Government. However, the hon. Member for Hyndburn cannot have his argument both ways: it seemed to be that the fundamental difficulty in east Lancashire was too many homes and not enough people, in which case it can hardly be wrong if the new homes bonus generates more houses in places with more people than it does in places with an excess of houses. I want to tell—

[Graham Jones]

Will the Minister give way?

[Andrew Stunell]

I might give way in a moment, but not until I have finished my sentence at least.

I want to tell the hon. Gentleman that the £62,000 is the first payment in six years of payments on the homes brought into use in his area in the past year. That will be augmented by the homes brought into use in successive years. That £360,000 is real, additional money that Hyndburn would not otherwise have received. Some local authorities—Sefton metropolitan borough council, for instance—have used the incoming income as an underpinning guarantee to raise loans and finances in order to proceed with regeneration. That was one of the projects that my right hon. Friend the Housing Minister visited in Merseyside a few weeks ago.

[Graham Jones]

I was clear about what I said: if there is an oversupply of houses—more houses than people—there is low demand, and therefore, naturally, less from the new homes bonus. Hence we end up with the figure of £62,000, which is the 11th lowest in the country. The argument is perfectly logical, but it falls down when the Housing Minister says on the Floor of the House that we should not worry about losing housing market renewal because we will get the new homes bonus. That is where the argument falls down; the rest is linear with all the ducks lined up—that is my point. On the Under-Secretary’s mention of extra money, the new homes bonus is being top-sliced from the formula grant after year two, and it is also being taken from the planning delivery grant, so I do not accept his point.

[Andrew Stunell]

First, my right hon. Friend the Housing Minister has certainly not said that regeneration will be funded by the new homes bonus—his point was that it is an important contribution. The example of Sefton shows that local authorities are well able to exploit that and to benefit.